IT stocks tumble following Accenture’s quarterly report

Indian investors woke up to a sea of red across IT portfolios on Monday, June 23, 2025, as major technology stocks slumped following disappointing cues from global IT leader Accenture. Despite Accenture’s better-than-expected quarterly revenue, investors panicked over declining new bookings and cautious signals about future demand. 

The fall in the Indian IT sector underscores how interconnected global IT players are. The selloff of IT stocks highlights the market's nervousness. Let’s understand how this has affected the Indian IT sector.

Accenture’s Mixed Signals: Revenue Beat vs. Bookings Slump

Accenture reported revenue of $17.7 Billion beating analysts expectations of $17.3 Billion. It marked an increase of 8% year on year revenue. Generative AI services alone fueled this growth contributing around $1.5 Billion in bookings. EPS of the company rose sharply by 15% reflecting a strong operational efficiency.

However, beneath this solid performance lay worrying trends. New bookings—a critical indicator of future revenue—declined 6% year-over-year to $19.7 billion, missing analyst expectations by a significant $1.8 billion. This marked the second consecutive quarterly contraction, accelerating from Q2’s 3% drop.Both consulting and managed services bookings were not good which indicated a decline in the dedication of the clients in the face of economic turmoil. Investors focused intensely on this disconnect between present results and future pipeline.

Despite forming a new "Reinvention Services" unit focused on AI growth under CEO Manish Sharma, Accenture couldn’t calm markets. The steep sell-off reflected deeper fears about whether even industry leaders can sustain growth amid tightening budgets. This negative sentiment swiftly crossed oceans to impact Indian markets when they opened Monday.

Indian IT Sector Feels Immediate Pain 

Indian IT stocks mirrored Accenture’s distress within hours of domestic markets opening. The Nifty IT index tumbled nearly 2% as heavyweights led the decline. Infosys emerged as the biggest loser, sliding 2.8% intraday, followed closely by HCL Technologies and Tata Consultancy Services (TCS), which both dropped over 2%. Wipro and LTIMindtree recorded declines exceeding 1.5%, painting a uniformly grim picture across major players.

This reaction seemed counterintuitive given Accenture’s revenue outperformance. However, Indian investors correctly interpreted the bookings slump as an ominous signal for their own IT services firms, which compete in similar global markets. Brokerage firm Motilal Oswal noted the concerning divergence: while Accenture thrives on AI-driven transformation deals, Indian IT still relies heavily on cost-optimization contracts offering less growth potential. The sector’s dependency on overseas demand, particularly from North America and Europe, left it vulnerable to Accenture’s cautious tone

Friday’s prelude in U.S. markets foreshadowed Monday’s Indian losses. Infosys’ American Depository Receipts (ADRs) had fallen 4%, while Wipro’s ADRs declined 0.34%. Analysts like CLSA and Morgan Stanley highlighted existing challenges for Indian IT: soft discretionary spending in retail and automotive verticals, weak deal pipelines, and only gradual, uneven recovery expectations. The geopolitical backdrop, including Middle East tensions mentioned in reports, added another layer of risk aversion.

Sector Outlook: AI Promise vs. Pragmatic Challenges

Accenture’s results revealed a complex industry crossroads. On one hand, generative AI adoption is accelerating dramatically, evidenced by its $1.5 billion quarterly bookings. CEO Julie Sweet emphasized leadership here, with 30 clients generating over $100 million each in bookings. This suggests tremendous long-term potential for technology service providers who can deliver transformative AI solutions. Accenture itself is restructuring, creating a dedicated "Reinvention Services" division to capitalize on this shift.

Conversely, current client priorities remain focused on cost control rather than bold innovation. Kotak Institutional Equities observed muted net-new deal flows and increased vendor consolidation—trends pressuring traditional revenue streams. Accenture’s declining bookings imply clients hesitate to commit to large new projects despite healthy ongoing work. This aligns with Indian IT firms’ experiences of delayed decision-making and elongated sales cycles for transformational deals.

Conclusion

Monday's sell-off in large numbers of Indian IT stocks shows once again how rapidly world opinion can be conveyed to local markets. Although the strength of Accenture's revenue and its advancements in AI offer potential views of the sector in the future, the current situation of more rickety bookings and sparing client spending is dominant.

For Indian investors, this implies weathering continued volatility. The path to sustained recovery hinges on visible evidence that Indian IT players can capture larger, high-value AI transformation deals—moving beyond cost-focused contracts. Until that transition gains momentum, patience remains essential, with realistic expectations for a gradual, uneven sector revival rather than a swift rebound.